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Hammer Time: The $700 Repohttp://www.thetruthaboutcars.com/2014/06/hammer-time-the-700-repo/
http://www.thetruthaboutcars.com/2014/06/hammer-time-the-700-repo/#commentsSat, 28 Jun 2014 02:07:16 +0000http://www.thetruthaboutcars.com/?p=854689My brother-in-law’s 1997 Honda Civic took a vacation recently, and it only cost me about $700. The customer who escorted the Civic to the humidity ridden swamps of Crystal Lakes, Florida, let’s call him, Mud, had already been financing a 2005 Ford Freestar from my dealership. Some weeks he would pay on time. Other times, […]

My brother-in-law’s 1997 Honda Civic took a vacation recently, and it only cost me about $700.

The customer who escorted the Civic to the humidity ridden swamps of Crystal Lakes, Florida, let’s call him, Mud, had already been financing a 2005 Ford Freestar from my dealership.

Some weeks he would pay on time. Other times, he would be late. The phone always worked though, and since the Freestar had been one of my unsellable cars of the past year, I was just happy to have the vehicle out there to what I hoped would be a good owner.

If only it were so.

One day, I got a call from Mud while his chain smoking soon-to-be pregnant ex-girlfriend was screaming at him in the background.

“Hey Steve. That Civic you have on the lot. Can I exchange that with the Freestar and just make the same payment?”

Normally I say no to these things because the math doesn’t work out and, even if it does, exchange customers often get into the habit of delaying maintenance on their vehicles. Right around oil change time, these customers will come back to the lot and ask for an upgrade. What I do instead is tell them of a place a mile down the road where they can get the oil changed for $20. The cheap price has a surprisingly nice halo effect on the affordability of the vehicle they drive, and then I never hear from them until I start having payment issues.

Mud wasn’t bad when it came to payments. But his ex-girlfriend’s smoking meant that the Freestar would need to have the interior detailed, and God knows what else.

“Bring the Freestar down and let me see what we can do.”

When I saw the platinum colored Freestar, I was both surprised and not surprised. The interior was still in decent shape. It had a faint smell of smoke, but not too bad. What did surprise me was a nice big dent on the driver’s door. That would cost some money to pop out along with the interior detail.

178,000 miles. When he had bought it from me it had all of 170,000. Or so I thought. This guy was driving close to 1,000 miles a week, and whatever I gave him, if I gave him anything, it needed to be able to handle that constant driving.

Thankfully, my brother-in-law’s Civic had more or less been overhauled before I got it. New belts, water pump, tensioner, plugs, wires, on and on. I did need to put four new tires on it, which turned out to cost only $233 thanks to my usual discount and a $100 gift card promo that the chain tire store was offering at the time.

I tried retailing the Civic for $3500, then $3300, and then $3000.

Nobody wanted it, and those that did just didn’t have the money. I had two kids in college and one older fellow tell me that they were going to get it in the next week, two weeks, when they got a settlement check, etc.

I didn’t care that much either way. Even though it was an unsellable car, I enjoyed driving thanks to my brother-in-law’s maintenance regimen. I knew it would eventually sell.

Then things started to get a bit, complicated. My sister-in-law mentioned to my wife, that my BIL hadn’t sold the vehicle for a lot of money, and that she thought it would get more than the $2000 I had paid for it.

When I hear things like this, I pretty much assume that this recent decision may not have been as smooth as I had initially thought.

I also couldn’t ask for nicer in-laws over the years. They have always been wonderful to me and my wife, and I didn’t want anything that would cause hard feelings. When their Camry’s engine blew up a couple years ago, I bought the vehicle for all of $500 with a very nice body and a perfect interior. I replaced the engine with a JDM 2.0 four cylinder, financed it, had it voluntarily repoed in Denver (owner went out there and ran out of money). I then paid $750 for it to be delivered back to Atlanta, and sold it for $3000 cash which turned out to be my net profit.

I was thinking about selling the Freestar for cash, financing the Civic, and when I got my money back out of the Civic (about $2400), I would give my in-laws the profits. They had two young kids and I figured out this money, nine months from now, would be a perfect way to balance out their monthly daycare costs that I remember paying for back in my 30’s.

It was not meant to be. At least not when it came to Dirt, I mean, Mud. He was a pathological liar along with, what I would later found out, a serial impregnator. I should have taken the keys to the Freestar, shot him, and Jersey dumped his ass in Deliverance country.

Instead I took $305. $120 for what he owed on the Freestar, $120 as a payment cushion on the Civic, and $65 for the actual cost of the detail. I forgave the dent on the Freestar because, psychologically, if you do a nice favor for someone, they tend to be far less screwy with you in the future. However this isn’t always the case, which is why I also asked him to give me the afternoon so that I can straighten it all out with my bank.

Well, the Bank of Steve has certain strict requirements. One of them is when you have a high-risk customer, you always put a GPS on that vehicle. Since I had initially planned on selling the Civic for cash, I had to take it to the mechanic shop so that we can put one in it. The cost of the unit is $129, and once we had three successful hits on the GPS, Mud got the keys.

Mud then took the car, went to Florida, and decided to play the BS game.

Instead of telling me the truth, that he had no job, he decided to tell me over the weeks, “I’ll get the money in on Tuesday.” Or, “I’ll be riding up to Georgia this weekend and I’ll get the money in and set up an automatic payment with Wells Fargo.” Every week was a new lie, a new excuse, and a new headache.

My policy with payments is relatively straight forward.

If you can’t pay me, then just tell me the truth.

If you can’t tell the truth, at least return my call.

If you can’t bother to return my calls over the course of three days, I’m going to get back my property.

And it is my property. Just because someone pays for the use of it, doesn’t mean they own it.

I get especially steamed when someone tells me, “It’s my car.” or “I already paid too much for it.” Hello? You don’t own my property. I am also not here to lecture you . My business is to provide for my wife and family and if you have some genuine catastrophic event that’s taken place, I’ll put the payments on a temporary hiatus. If you’re nice, I may even try to figure out a way to work off the balance with a side job related to your former work, so that you can become a long-term owner (and keeper) instead of a perpetual debtor.

Most of the time, I don’t want the car back. In the past I’ve had cleaning women do interior details. Small farmers pay me in chicken, eggs and tomatoes. I have even accepted lawnmower repairs, small generators, automotive repair work, assistance with transporting vehicles to and from the auctions, and minor landscaping projects.

However in this case, I wanted the car back, big time. Last night the repo company scooped up the Civic that was suntanning in Lakeland, Florida. The old cost was $250 for the repo. $65 to transfer it to a nearby auction. $20 to mail the auction the keys so that it can be loaded onto a transport truck next Tuesday, and $275 to have it hauled back to my dealership.

I hope to see it on Thursday. From there it will likely need a $65 interior detail, and $42 to relist it on Autotrader and Craigslist.

So now I have another stickshift back on the lot. The Freestar sold for $3000 cash to a Latino family thanks to my posting the Craigslist ad in Spanish. By my calculations, this guy managed to do about 10,000 miles of driving for which I netted about $700. I got nailed by Mud, but that doesn’t mean I can’t wash myself of him and move forward to the next chapter in life.

]]>http://www.thetruthaboutcars.com/2014/06/hammer-time-the-700-repo/feed/116Hammer Time: Trading Cards, Tradin’ Carshttp://www.thetruthaboutcars.com/2014/05/hammer-time-trading-cards-tradin-cars/
http://www.thetruthaboutcars.com/2014/05/hammer-time-trading-cards-tradin-cars/#commentsThu, 01 May 2014 11:00:20 +0000http://www.thetruthaboutcars.com/?p=812466Rookies. All-stars. Hall of Famers. Those were the only three types of baseball cards that I thought were worth the trade when I was a kid. I was eight years old, but that didn’t stop me from becoming diligently schooled by my three older brothers who knew the ropes of other similar hobbies such as comics, […]

Those were the only three types of baseball cards that I thought were worth the trade when I was a kid. I was eight years old, but that didn’t stop me from becoming diligently schooled by my three older brothers who knew the ropes of other similar hobbies such as comics, coins, and stamps.

The drill was simple. Every time someone wanted to trade cards with me, I would ask them one simple question.

“What’s your favorite team?” From there, I would bring out an album loaded with baseball cards. Every one in mint condition and encased in plastic sheets. “Pick your favorites!” They would gather their own, and I would go through their collection, find the fresher cards in mint condition, and gather mine.

Over 30 years later I do the exact same thing with cars. I sell based on interest and buy based on condition and long-term reliability. I’m still not loyal to any brand or model these days. For me, even after all these years, the opportunity to buy and sell any car comes down to three simple concepts I learned in my youth.

Condition, presentation, and price.

Every car has its price, and it’s the condition and presentation that determine the value.

Unpopular vehicles may be the cheapskate’s dream. But they’re a seller’s nightmare.

Three door minivans? Buy them low, sell them quick, and avoid them like a painful venereal disease. A cheap car with low demand always takes up space for too long. Base model non-sporty wagons from the Y2K era with 5-speeds? Same deal.

Low demand, low performance cars net low returns. Even if you are a stingy bastard. In baseball card terms, they are the common players that nobody wants. The Chicken Stanleys who are used as cardboard fodder for the Jeff Bagwells.

Camrys and Accords? You have to pay a premium for the good ones and unless you finance, you better get one without major accidents. What sells for cash at this “all-star” level is the mint condition version.

You can get away with selling a popular car with a rough history to those with bad credit. Whenever I see a person who is struggling with a fancy car, I think about the traders who could never keep their good cards for long. There was always something a bit more new and popular that would catch their eye, and it was my job to figure out what it would be.

Baseball cards and cars pretty much sell the same way.

1) Always offer a history.

Folks are always purchasing three things when they buy a used car. The model they want. The prior owner they prefer, and the maintenance history they desire. Even if you offer a piece of miscellaneous nothing such as, “I bought it two years ago from an older guy who lives in Pawtucket.”, the potential buyer will usually appreciate the fact that there is one less uncertainty in the history of your vehicle.

2) Sell yourself.

If you come across as an honest guy and an expert (or at least knowledgeable), you’ll have a big leg up on the 90+% who are either too scared or too corrupt to do the same.

3) Don’t be afraid to say a car has an accident. Everything has defects.

In fact, telling folks specifically what happened can be a great way to affirm #1 and #2. A VW Beetle TDI I recently sold had an accident on the driver’s side that required a repaint on the door and a replaced front quarter panel. By showing what was done, emailing the Carfax history beforehand, and specifying who did the repair, I was able to show the buyers that I had nothing to hide.

That candidness alone often gives you a price premium over those sellers who just glaze through everything. When I sold cards, I would mention the small defects and often times, it made the other guy feel like he wasn’t getting screwed.

4) Clean the damn thing! Please!

You ever go to a junkyard and see all the wonderful souvenirs that are left behind by the last owner? Well, the junkyard doesn’t have to worry about those endearing mementos.

But you must certainly do.

The next owner probably doesn’t want that Hello Kitty CD holder on the sun visor. All those crumply things in the glovebox? Remove them and reorganize what you have so that you can give them a maintenance history that they can physically hold. I would get the car washed, vacuumed, and invest in a basic spray on or quick wax along with an hour or so of time removing stains and marks.

A mint condition baseball card was always a better buy in the eyes of my customers when I was a kid, and a clean car is no different.

5) If the car doesn’t sell immediately, study the market.

Edmunds, Kelly Blue Book, NADA, and even dealer-focused price guides such as Black Book and the Manheim Market Report all have one thing in common.

They are rough approximations based on imperfect data… and much of the time, those imperfections are due to a seller’s inflated idea of their vehicle’s condition.

Everybody falls victim to this at one time or another. Even dealers. Even yours truly. Most sellers tend to price their vehicles in clean condition even though their vehicles are somewhere between average and God awful. If you see no action out there, forget about the price guides. Look at how the competition is pricing the same type of vehicle. The marketplace always tells you things that the price guides miss.

6) Pictures, pictures, and more pictures.

Take pictures of everything before you advertise…. and take multiples. I have often found that early mornings offer the best time when shadows and sun reflections have the least impact on my pictures. Overcast days are also great for this purpose. So make sure to take pictures of everything; especially those close-up areas that aren’t perfect.

If a seller is already comfortable with the price, showing them the cosmetic issues now will eliminate the desire for a lower price when they see those defects in person.

7) Organize The Sale: Bill of Sale, Money, Title, Plate and Keys

A lot of folks have trouble selling cars because it’s an organization game. You have to bring everything together and understand the sequence of events so that the flow of the deal is always in motion. Shake hands. Answer questions. Give them physical records of the car’s history. Let them have time with the car. Be patient. Leave them alone. Give them space.

When you are organized, you can afford to be laid back and observant. People like that because it means you’re paying attention to them and putting their needs first. When I was trading baseball cards, the eye candy alone was enough to keep me and the other person occupied. With cars there are more steps, but the same human elements of the transaction applies.

When you’re organized, in anything, it’s easier for both parties to enjoy the experience. It also keeps you honest because you don’t have to figure things out on the fly.

Am I wrong? Is the four-square method of customer manipulation more effective than being a mensch, putting your best foot forward, and keeping organized?

]]>http://www.thetruthaboutcars.com/2014/05/hammer-time-trading-cards-tradin-cars/feed/22Hammer Time: Morning Callshttp://www.thetruthaboutcars.com/2013/01/hammer-time-morning-calls/
http://www.thetruthaboutcars.com/2013/01/hammer-time-morning-calls/#commentsMon, 21 Jan 2013 14:00:33 +0000http://www.thetruthaboutcars.com/?p=474422Morning phone rings at the car lot… Me: Hello? Random Stranger: Hi there, like, I have this friend you know and he told me that you finance vehicles, and his name is Emmanuel and aahhh, like I was wondering, well, uh, do you have any Toyotas and like, do you, ummm… finance vehicles you know? […]

Random Stranger: Hi there, like, I have this friend you know and he told me that you finance vehicles, and his name is Emmanuel and aahhh, like I was wondering, well, uh, do you have any Toyotas and like, do you, ummm… finance vehicles you know?

Me: I’m sorry. Who is this?

Random Stranger: My name is Lashandra and like, you know, I was really wondering whether you have any Toyotas, and like, how much can you give me if I came by with four or five hundred dollars because my friend Emmanuel…

Me: Where do you live?

Random Stranger: I live in Georgia, like, you know, I live in this state.

Me: (Laughing) I know you live in this state! Where in Georgia do you live? I only finance folks in Paulding, Cobb, and Douglas counties.

Random Stranger: Oh, I live in Fulton. Emmanuel said that you…. (three minute diatribe with 17 likes, 14 aaahhs, and 11 you knows).

Me: Do you have any coffee nearby?

Random Stranger: Why would I need coffee?

Me: I need coffee. I really need a cup of coffee. Call me back.

Random Stranger: Well, um, ahh, OK… but Emmanuel said that you (I give the phone to my confused dog and walk off.)

Craigslist always seems to bring out the weird people on a Friday morning. Or it could be Ebay on a Wednesday afternoon. Or even Autotrader on a Monday evening. Sometimes I get the most random, scary, and gibberish driven calls you can imagine. We’re talking about people still stuck in the outer space of their daily lives in a futile pursuit of a Planet X located in the netherworld of their cranium.

Here are a few personal examples…

The Questionnaire: “Hi there. I just have a few questions to ask you. How many miles does it have? How many owners? When was the last time you had it serviced? When was the last time you changed the oil?”

This is followed seven minutes later with…

“How often have you used the glovebox? Is the glovebox fully operational? How about the headliner? And the driver’s side cupholder. Do all the cupholders work? Do you have a Carfax? Good. How many owners?”

The Dreamer: “I see you’re selling a Harley on Ebay. Let me ask you a question. I have never been on a highway while driving a motorcycle. Do you think I can drive it up to Tennessee?”

NOTE: After explaining to her the Darwinian nature of her quest, she still ended up becoming the winning bidder. Following a two month wait, her son came down to Atlanta in a Saturn with some bungee cords. He was going to tie the Harley up on the roof and drive it back.

The Hardsell Discount SOB: “Hi there. I want to buy car! You sell it at discount?”… after explaining that I don’t negotiate over the phone and the car is listed for $10k… “You take $6000? I have cash! I have cash money!”…

NOTE: You never, ever, want to deal with these people face to face. What they will usually do is only speak in their native language and then act completely clueless when you explain to them the price. This will be done over an agonizing two hour period where you will find renewed interest in sorting out your trash bin, paying bills, and dialing in a 34-part Taco Bell survey.

The Needle-(nose): “Yeah. I saw that Mercedes window regulator you have on Craigslist for $80. I have $20 cash and I’ll take it off your hands. Will you take 20?”…

Five minutes later…”Will you take 25? No? Well call me when you’re ready to sell!”

Text, fifteen minutes later: “Cmn man! I ned it! Ur car a deesl?”

Seven texts later: “OK30. Final ofr!”

Two days later: “Stel god it?”

NOTE: This is by far the #1 reason why most dealers won’t part out a crappy car on Craigslist anymore.

IDK: “I don’t know. I’m just looking for something that is safe and reliable.”

Me: “Well, I have a 2003 Volvo S40 for $5000. It was dealer maintained since day one and I can email the Carfax and pictures if you like.”

IDK: “I don’t want a European car.”

Me: “Do you want American, Korean, or Japanese?”

IDK: “I don’t know. I’m just looking for a car.”

Me: “Well, what price range are you looking for?”

IDK: It doesn’t matter. I’m just looking for A to B.

Me: “Well, I have an 02 Corolla. It…”

IDK: I want something bigger and newer.

NOTE: Fifteen minutes later you will find out that they want to spend no more than $5000 on a five year old car… with leather.. and it must be a Toyota Camry LE.

The Life Story! :

Me: Hello?

“Yes, I’m calling about that 1998 Subaru Outback. You know I used to have one of those and let me tell you… those cars…”

Fifteen minutes and 1 very strong cup of coffee later…

“Well, I’m just looking. But call me if any more of those get in…”

NOTE: On a slow day the Life Story can be one of your most enjoyable customers because they actually know something about cars. The life story is more often than not a bored enthusiast who also has a long list of hobbies, random stories involving their kids, and an unusual desire for “that one car”. I even had one fly down to pick up a car from me, sight unseen.

The “I saw it on TV” Caller #22:

Me: Hello?

TV: “Wha-cha got for a thousand dollars!”

Me: “I’m sorry. What is it you’re looking for?”

TV: “I’m a wholesaler. I’m looking for a cheap thousand dollar car. I need one with a good engine and good transmission. I wholesale cars.”

Me: “Where are you out of?”

TV: “Well… umm… I live in Marietta.”

Me: “Why are you telling me you “live” in Marietta if you’re a wholesaler?”

TV: “Well, I’m just getting started.”

Me: “OK then. Where is your place? I know plenty of wholesalers out of Marietta. None of them sell thousand dollar cars out of their home.”

NOTE: Most TV customers have visited public auctions and haven’t quite grasped the fact that cheap cars at those sales are cheap for a reason. Most cars wholesaled for $1000 these days are worth more parted out than kept together.

I usually average about two to three of these calls a month.

Every business deals with these types of customers in one form or another. So since we’re headed to the thick of another nice long three day weekend, feel free to share your stories. All the best!